My niece, Marci, gave me an earful the other day when I phoned to say ‘Happy Birthday’ to her mother, Socorro (my sister). They live in Madison, Wisconsin. Marci is a dedicated biomedical research technician whose job was eliminated by the cut in research funds from the National Institutes of Health. It took two years for Marci to find another job. Since it was at a lower pay scale, she some how managed to readjust her mortgage payments so as not to lose her home.“Uncle Hilbert, “ said Marci, “What the wealthy do not understand is that by hoarding all that money, the rest of us do not have any. People who earn interest on their secure investments are not creating more of anything that becomes wealth.” Now it turns out that a World Bank economist, Joseph Stiglitz, author: “The Price of Inequality” has said the same thing.
Interest income may be defined as the “rent” paid to use someone’s money. Stiglitz recently pointed out two perspectives: 1) ‘Rent’ does not produce wealth. 2) Student loans, which now exceed credit card loans, is a factor in preventing former students from taking their place as consumers in the economy. They are paying off their student loans which were advanced by banks, which in turn were insured by the FDIC. So the banks assumed no risk at all, because if the student defaulted, the Federal Deposit Insurance Corporation would pay the bank. The bank would get its money back.
Marci also said, “The very wealthy, by not paying a fair share of taxes are creating a community environment wherein many persons are underemployed and unemployed. These wealthy folks do not want the government to provide unemployment funds, to support public health care like MediCare, and supportively fund education. The result is that many persons with no resources resort to burglary, theft, and muggings. Crime has risen because people do not have the money to spend on essentials. So they get desperate and violent. The wealthy become paranoid, and rightfully so, because their house maids, butlers, chauffeurs, and gardeners may end up trying to steal something of value.”
“Wouldn’t they rather have a community that is safe and secure? A community wherein individuals had enough wage earnings to buy what they need…..housing, food, clothing, medical care, education for their kids, etc.? We would all be safer; less fearful. Our community is now so messed up because people do not have income, so they resort to violence. Violent shootings are on the rise. As a result I do not go out on the streets during evenings and nights unless I really must. Then I do that with a lot of anxiety.”
“One more thing, Uncle Hilbert,” continued Marci. “I am mad as hell that Wall Street has committed white collar crimes which are not being prosecuted. Here I am, a single mom, who is taking care of my elderly mother. Who helps me? NO ONE! My income is just a bit too high. I have learned to pinch every penny to make it. But I have no extra money for some things I would like to buy. Don’t those wealthy folks know that the trickle down theory does not work.
“Why not try a ‘trickle up’ economic theory? All my friends and associates would spend that extra $2,000 right now on things we want, and think we need, if the federal minimum wage was raised to $10 per hour. They (the wealthy) need to pay their fair share. Republicans need to stop protecting the wealthy because they are destroying America’s economy. The U.S. Congress needs to be practical…..fund those infrastructure projects; fund those schools that teach the poor’s children, provide health care, provide funded programs for our military warriors returning from the Mideast. All this can happen if the very wealthy begin to pay their fair share of taxes.” I asked Marci to let me speak to her mother, my sister, Socorro because after all, I did call to wish her a happy 86th birthday. I could tell that Socorro was very pleased that I called on her birthday. I am not so certain that she sensed my pride in having a niece, Marci, who could assertively express her feelings and sense of what had happened to her since 2008 when this recession began.
Marci raised a very good question. “How can ordinary people communicate what the wealthy need to understand?”